April is National Financial Literacy Month. The month is particularly meaningful to Kindbridge Behavioral Health, considering that we’re America’s leading problem gambling treatment provider. But of course, problematic gambling behavior isn’t the only mental health concern tethered to negative financial outcomes. We have covered this with a recent look at debt and mental health statistics which you can reference right here. One thing that consistently comes up when analyzing surveys among indebted population segments, are reports of elevated anxiety, stress, and depression that are the result of being pressed by debt collectors.
Aren’t there protections in place to mitigate the potential for mental health harms?
Debt collection agencies are regulated by the Federal Trade Commission (FTC) which is the primary enforcement agency for the Fair Debt Collection Practices Act (FDCPA). The FDCPA makes it illegal for debt collectors to use abusive, unfair, or deceptive practices when they collect debts. Prior to 2025, further protections were in place under the Consumer Financial Protection Bureau (CFPB), but CFPB resources have been cut under the current presidential administration. But even before the CFPB was sidelined, concerning connections between debt collectors and mental health of debtors have persisted. Is the FDCPA with or without supplementary support from CFPB enough? Or should debt collectors take a more compassionate approach when engaging debtors? There is a strong case to be made for the latter that benefit both sides of the communication pathway. Please keep reading.
Why Debt Collectors Should Consider a More Compassionate Approach to Debtor Engagement in Support of Mental Health
I. Commitment to Corporate Social Responsibility
Statistics regarding debt collector roles in compromising the mental health of those with problem debt include the following:
In a recent study, more than one out of every three young adults face debt collection pressure by around age 40, with higher rates among low-income and Black young adults. The study confirmed that debt collection pressure is associated with increased psychological distress, with more severe consequences among low-income young adults (source)
People with debt are three-times more likely to have depression, anxiety and stress that is directly related to the worry about debt (source)
Another survey conducted by the Money and Mental Health Policy Institute identified the following mental health triggers contained within debt collection practices:
- Debt collection practices that are dismissive of a debtor’s broader circumstances.
- Debt collection practices that require debtors to explain themselves over and over again.
- Threatening tone of communications from debt collectors that reinforce the potential for legal action and the impact on credit scores.
- Overwhelming frequency of communications from debt collectors. Approximately 25% of debtors report being contacted by their creditors 16 times or more per month.
Understanding the detrimental role that a debt collector can play in the mental health of citizens, the concept of Corporate Social Responsibility (CSR) comes into play. CSR is a self-regulating business practice where organizations integrate community, social, and environmental concerns into their operations and interactions with both consumers and stakeholders. The aim of CSR is to create value for both the business and society, asking business leaders to reduce harm where possible when making decisions about company practices. CSR is expected of SMBs and large enterprises alike in modern times.
II. Protection Against Complaints and Law Suits
Debt collectors in the United States can be sued for harassment under the above mentioned Fair Debt Collection Practices Act (FDCPA). If it can be shown that debt collectors have used abusive, threatening, or unfair means to collect debts in a manner that constitutes harassment and compromises mental health, a debt collector may be found to be violation of the FDCPA. Conversely, those that exhibit and are forthcoming about a commitment to mental health awareness and consumer compassion may be less vulnerable to successfully lodged complaints and law suits.
III. Competitive Advantage
CNBC reports that there are over 7,000 debt collection agencies in the United States, including small local agencies and large national firms. In other words, it’s a highly competitive industry and anything that can be done to gain a competitive advantage can ensure survival in the current landscape. In 2025 and beyond, a competitive advantage is best attained through improved public relations. Enhanced PR comes from adherence to Corporate Social Responsibility (see above), transparency about caring for public health, and avoidance of negative backlash to come from spending time in court for complaints of abuse and harassment.
IV. Healthier Debtor More Likely to Clear Debt?
Studies indicate that individuals who struggle with their mental health are more likely to struggle with debt repayment. This is because they may be less likely to adhere to debt advice, as mental health struggles can impact financial decision-making. The risk of default grows if a debtor cannot hold down a job due to their mental health problems. Considering this, it’s in the best interest of debt collectors to do all they can to engage consumers with compassion. This helps ensure that they don’t trigger negative emotions that may cause them to spiral deeper into despair. A healthier debtor may be more likely to follow helpful guidance and subsequently repay their debts.
V. Internal Protections for Debt Collector Workforce?
Interestingly, research has found that being a debt collector takes its own mental health toll. Nearly 46% of respondents found debt collection to be an extremely stressful job, indicating that the process is loaded with tension and anxiety. More than 15% of survey participants reported that they found debt collection to be moderately stressful, while almost 24% find their job uncomfortable. Only about 15% report experiencing no discomfort. If the industry chooses to exhibit greater mental health awareness and become more compassionate in the way they engage debtors, they may enjoy a healthier and less stressed workforce as a side effect.
How to Invest in Mental Health Awareness and Support
Debt collectors are encouraged to solicit the services of a leading mental/behavioral health support provider. This is necessary to train staff to better understand language and other engagement measures that may trigger unnecessary negative reactions and responses from consumers. In developing such a partnership, a debt collector can also refer debtors they are working with to convenient access to support (as needed). This exhibits compassion and helps accomplish the goals detailed above.
Kindbridge presents an ideal partnership fit for debt collectors. We offer the public a more confidential and convenient mental health platform that can be accessed from anywhere at any time. We also offer direct billing through insurance providers, which is important when considering the financial status of those in arrears. Reach out via a preferred form of contact below to learn more about corporate programs and partnerships.
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